IKN #281Premium

The IKN Weekly
Week 281, September 28th 2014
Contents
This Week: Back to “near term trade idea”, US Jobs week, Less gold more copper
Fundamental Analysis: Trevali (TV.to): A potential near-term trade on production growth.
Stocks to Follow: Overview, First Majestic (FR.to) (AG), Rio Alto (RIOM) (RIO.to), Timmins
Gold (TMM.to) (TGD), Coro Mining (COP.to), GoldQuest Resources (GQC.v.
Copper Basket: Overview, Hot Chili (HCH.ax), Nevada Copper (NCU.to).
Low Cost Producer Basket: Overview, Franco Nevada (FNV) and Silver Wheaton (SLW).
Regional Politics: The disconnect between politics and mining business, Uruguay edition,
Brazil: Rousseff leads, Peru: One week to go to the regional elections, Mexico: Mining
companies now guaranteed not to lose concessions for environmental contamination cases,
Argentina: What locals get to read about mining projects.
Market Watching: Gold Reserve (GRZ.v) redux, Precipitate Gold (PRG.v): No need to rush,
Toromocho production ramp up slower than even re-worked numbers
I remind subscribers that no part of this newsletter can be copied, reproduced or
given to any third party without the express permission of the author.
This Week
Back to “near term trade idea”
Which is sad. This week’s Fundamentals...” section looks at the much-hyped Trevali (TV.to) and
for once I think it might be worth a small trade (but will wait until the wider market has shown
its hand next week before making any trigger-pull decision). However, I do feel it’s a case of
retreat when the only thing that can really get me interested is a shot at a near-term flip trade
idea that could bag 155 or 20% in the space of a couple of weeks if all goes well. It’s that kind
of market atmosphere I’m afraid, sapping the will of even the strongest of bulls.
My best (only?) advice at the moment is to hunker down, don’t sell much, don’t buy much, wait
for some definition with some cash on the sidelines. That’s what I plan to do. In the meantime,
I’ll amuse myself with small. Round the edges stuff such as TV.to near-term.
US Jobs week
They seem to come around very quickly these days. On Friday we have one of the U.S.A.’s
more keenly awaited macro datasets, the BLS jobs report. Calculated Risk (1) tells us that the
current consensus with a week to go (it’ll tighten up, it always does) is “...for an increase of
215,000 non-farm payroll jobs added in September, up from the 142,000 non-farm payroll jobs
added in August. The consensus is for the unemployment rate to be unchanged at 6.1% in
September.” From reading between the lines, I get the feeling Bill McBride is taking the over
this week. Anyway, keep one eye on his incomparable site for more as the week unfolds.
Less gold more copper
I’m long copper and although so far at least the smallish trades placed on the sector are having
1

a tough time of it, so far at least it’s not overly uncomfortable. Here are four short lines on what
I consider to be “the copper exposure” of The IKN Weekly at present:
• NovaCopper (NCQ.to): Just in the green, moving with the market tides, low trade
volume, unlikely to add further
• Amerigo Resources (ARG.to): A seller turned up last week, price right for addition
now
• Reservoir Minerals (RMC.v): Largest of the three copper positions though still
reasonably moderate, now down by 16.5%, momentum dropped, will hold easily
enough, potential add and average down if bargain basement prices show up
• Coro Mining (COP.to): Very small remnant position, holding through for better things
ahead, can always add.
To those you could argue a case to add Lara Exploration (LRA.v) thanks to its selection of
copper targets among its held assets, and there’s even a case for Rio Alto (RIO.to) thanks to its
stage 2 copper project for La Arena, which seems to have been again forgotten by friend and
foe alike. I still haven’t made the decision to really dive into the junior copper sector, but I like
the way in which the industrial metals market is shaping points more.
But the point today is that as far as I’m concerned there’s still plenty of room left to up the
copper exposure here. Those stocks under consideration, aside from the potential to add to any
of the above, are Hot Chili (HCH.ax) and AQM Copper (AQM.v) as they’re both the type of
beaten down price I’m most interested in. After those comes NGEx Resources (NGQ.to), which
is a larger and more advanced type of play. As the tide of money retreats and until signals are
better, there’s no point in rushing in with more cash and exposure will do as stands. But copper
has been holding well and that’s despite weeks of bearish talk about its impending demise. The
China factor is clear but we need to add in that economic recovery in USA is obviously bullish
for industrial metals demand down the line.
From here gold is a tougher one to call and although I remain with one foot in the bullish camp,
the logical argument for gold going higher is more difficult to make (for starters, much will
depend on how the US Dollar trades versus lesser currencies). Copper’s bull case is clearer and
more straightforward and the junior exploreco stocks it underlies have been beaten up just as
nastily as the gold tinycaps.
Fundamental Analysis of Mining Stocks
Overview
Sometimes I start out with the plan to be concise and fail miserably. Other times I know it’s
going to be a long piece. This time the idea really is to be short, sweet, get to the point and
move on. What comes up in the next three or four pages is an argument for a near-term trade
in Trevali Mining (TV.to) (TREVF), with the intel laid out then a call to wait for a couple of days
to see what this most drab of markets does to the stock and the wider scene before buying.
The trade is planned as a near-term flip that looks to take advantage of good production news
in the pipeline. If it works, I plan to take a 15% or 20% gain, sell and move on. It’s that simple.
Trevali (TV.to): A potential near-term trade on production growth
While the Canadian analytical world catches on to the way in which gold companies are obliged
by the government to report monthly numbers in Peru thanks to the open IKN blog (2), it has
to be said that the numbers from Rio Alto for August aren’t much cause for surprise as the mine
is running notably and reliably. It’s no use having an early tell on numbers if the numbers bring
nothing out of the ordinary and over at RIO.to these days, strong production and outlook isn’t
2

the exception, it’s the norm.
What you want from a hidden dataset is something that sticks out and if the Mr Ovais Habib of
Scotia had really know what he was doing, instead of just faking it for clients, he’d have been
able to dig into other metals production numbers and find what Trevali Mining Corp (TV.to)
(TREVF) has been doing recently. Let’s start with the 2014 year-to-date price chart for TV.to
and as you can see, this stock has done
better than the average so far this year. At
Friday’s close of CAD$1.17 (sidebar: the
TREVF US pinksheet ticker trades reasonably
well too) it’s 17% up on the year but it too
has seen a slide from recent highs.
TV.to is in essence a zinc play and that’s one
of the main reason’s it’s done well this year.
Zinc the metal has broken through $1.00/lb
and attracted attention along the way, with
bullish noises being made about its tight
supply down the line (though I’m obliged to
say at this point that this bull argument gets
trotted out for zinc most every year and I’m sceptical at best on its validity as a longer-term
price driver). Another reason for TV.to’s good performance is its marketing factor, as this
company comes from the Cardero Group stable and is run by people who really know how to
put a stock and story in front of the world (and if you hadn’t worked it out that was me being
very, but very nice indeed towards Henk van Alphen and his crew of BS merchants). It’s also in
its first year of commercial production at its Santander mine in central Peru (after years of
delays and capex overruns, paid for with share dilution) so it has the positive growth aspect to
its story at the moment, too.
But as you can also see from that above price chart, we’re significantly off the years best prices
($1.40 or so) which may offer the trading opportunity today’s article sets out. Here’s why
Recent production at Trevali (TV.to) Santander
First stop is the Peru MEM website and the right corner (3) of the stats therein (it’s not the
easiest of sites to navigate, then again it’s not rocket science). There you find monthly
production totals for zinc, lead, silver and
Trevali: Monthly production
copper for the TV.to Santander mine (NB:
5000
We ignore the small copper production
4500
today, considering it a very minor credit)
4000
and once collated, here’s what a monthly 3500
production chart looks like at the moment: 3000
2500
With production registered since October 2000
1500
2013, we now have nearly a year’s worth
1000
of information on Santander. During 2q14
500
the mine went through a re-tooling
0
program and production as you can make
out was somewhat affected, but as we
now have two of the three months of
3q14 (July and August) in the bag, we can also see that things are going pretty well at the mine
which points to a good number from the company come October.
Revenues calcs
Next is to factor in metals prices, and in this chart we take average spot prices for the three
main metals, production at Santander, then do the necessary simple math:
3
tco von ced 41naj bef ram rpa yam nuj luj gua
source: MEM filings
soliK
ro
sennot
)gnidneped(
Ag kilo lead mt zinc mt

Trevali: Gross metal revenues, per month
U$m
12 Ag Pb Zn
10
8
6
4
2
0
oct nov dec jan14 feb mar apr may jun jul aug
source: MEM, Kitco, IKN calcs
What this shows is that in August, Santander churned out nearly $10m in gross metals
revenues and the growth over the last three months points to likely likely strength in the
months to come, too. TV.to is enjoying the pop in zinc prices, as it’s coincided with stronger
production schedules and as long as we assume that the company sells all production, we’re set
for a decent revenues boost compared to 2q14.
On that subject, we can now get a feel for what TV.to might report for 3q14 revenues by
looking at its track record for the
earlier quarters of 2014. In this chart
Trevali (TV.to): Estimated quarterly revenues
U$m
below, we take the raw “calculated”
revenues number (that was done by 35 total qtr calc ($m)
the simple math of combining spot 30 total report revs ($m)
prices with TV.to Santander
25
production as per MEM) which you
20
see in the grey bars. To the right are
green bars which show the reported 15
revenues in TV.to’s quarterlies. 10
5
In 1q14, TV.to gave us its first
quarter of commercial production. 0
The total calculated revenue was 1q14 2q14 3q14est
$29.91m (some of the previous
source: TV.to filings, MEM data, IKN calcs
months’ of non-commercial
production got added in) while reported revenue for 1q14 as per the company filing was
$24.113m. That’s quite a lot lower, but this type of discrepancy isn’t unusual in the first quarter
of commercial production, plus we’re still likely seeing teething problems being smoothed out
along the whole of the mining, sales and delivery process.
In 2q14 I therefore contend that we probably saw something closer to the norm. As you can
make out visually, the IKN calculated number ($20.55m) was very close to the reality of
reported revenues ($19.86m). This type of “just a bit less” is what you’d expect from a miner
that’s selling its good to a middle man, especially as it takes out smelting refining costs in a
separate line item in its P+L.
Costs calc
Which brings us to the estimates for 3q14, the current quarter and the potential trade
opportunity. By taking the first two known months of the three month period, extrapolating for
the third, using known average metals prices and then sticking a finger in the air, we get to a
calculated estimate for revenues of $29m for 3q14. From there I assume that “real” revenues
come in slightly lower and lop off $1.5m as a best guess, which means I’m looking for TV.to
4

to report $27.5m in revenues in 3q14. If that turns out to be the case, it’s 38.5% higher
than in 2q14 and will give this company (and it’s very active marketing department) a lot to
crow about.
Which brings us to the costs side of things, which could turn out to be a little more difficult to
estimate in 3q14 because the ramping-up factor at Santander suggests the company may be
able to cut costs in the quarters to come. After thinking it over I’ve gone for a reasonably
conservative guesstimate on total costs of $18m for 3q14, which is basically the same number
TV.to registered in 3q14.
Here’s how the resulting chart looks, to which we can also add the derivative of revs and costs,
the Mine Operating Income (MOI):
Trevali: Operations Revenues, Costs and MOI
$m
30 total report revs ($m)
total costs
25 Mine Op Income
20
15
10
5
0
1q14 2q14 3q14est
source: TV.to filings, MEM Peru data, IKN calcs
NB: Total costs include: 1) production costs 2) smelting, refining and freight 3) royalty expense 4) depreciation and
amortization, the total of which is entitled “mining operating expenses” by TV.to in its filings.
It’s that black bar estimate at the right of the above chart that is most interesting to mine eye.
The house estimate of $9.5m MOI for TV.to is no small number, a significant improvement on
the earlier quarters of 2014 and as there’s little else to back out bar a couple of financial
adjustments and corporate tax, I see every chance of TV.to returning its first net profit in 3q14.
My guess would be a net net of $5m and with its current total of 280.6m shares out, that would
be an estimated EPS of 1.8c/share.
Though not a king’s ransom, it’s a bottom line that compares favourably to a company such as
Fortuna Silver (FVI.to) that’s double the market cap and as TV.to will make sure the news gets
around fast and positively, I’d expect the company to be able to ride a wave of bullish feeling
back to its recent highs.
Bottom line
Although the people behind Trevali (TV.to) aren’t my cup of tea at all they’re successful at
playing the market and with the newsflow to come, I expect them to take full advantage. Over
the long term TV will have to do a lot more in order to establish a higher price deck for its
shares (and today we haven’t even touched upon its Caribou / Halfmile projects in Canada, the
apparent next stage of growth (4) on which I’ll need far more convincing) but from the
available public data, 3q14 looks set to be a strong quarter, give the company a lot to shout
about and as long as the metals don’t continue to totally collapse on us, give TV.to a fine
chance of putting in a rebound and re-reaching recent higher levels.
How i’m going to approach this trade is easy enough: After the downdraft of the last two
trading days, there’s no point in immediately standing in front of the steamroller so there will be
no move as yet. However we can expect TV.to to hit the promo trial in week two of October
with a production report and if there’s a trade to be had at a good price, I’ll want to be installed
and long before then. Therefor I’m looking for 1) a respite in the bearish market and 2) a
5

window to buy TV.to for a near-term trade between October 1st and Friday October 10th. That
window gives the right potential and though it’s by no means certain I’ll hit the trigger and buy,
if I do I’ll be looking for something in the region of a 15% to 20% win between the buy price
and any eventual sale
Stocks to Follow
We’re happy to report that Salazar Resources (SRL.v) remained unchanged on the week. And
I’m happy to report that my decision to sell Santacruz Silver (SCZ.v) two Fridays ago is turning
out to be the right one even quicker than I expected (it’s 16.3% lower already).
Yes, it really was that bad last week.
Away from the SRL.v UNCH “good news” all 13 others lost ground, with the biggest percentage
losses taken by Coro Mining (COP.to down 15.4%), Focus Ventures (FCV.v down 12.7%),
Amerigo Resources (ARG.to down 12.7%), Lara Exploration (LRA.v down 11.3%), Minera IRL
(IRL.to down 9.7%) and Timmins Gold (TGD down 9.6%). Quite a heavy bunch of numbers.
Yes we can point to the drop in the price of gold and other metals, but the selling we saw was
above and beyond logic and had the classic hallmarks of money leaving the whole sector,
abandoning anything remotely associated with junior mining companies as the window closes
on 3q14. Make of that what you will.
With the sale of Santacruz Silver on Friday via the Flash update (see Appendix 1) there are now
14 open positions on our ‘Stocks to Follow’ list, one less than our self-imposed maximum. Six
are in positive territory, eight are negative.
6

Reco Current
company Ticker this week Avg Price date PPS Gain/Loss% Notes
Top Picks
Rio Alto Mining RIO.to hold C$2.30 07-apr-11 C$2.78 20.9% Top pick, $3.30 tgt June 15
Recommended long positions (in current order of preference)
Timmins Gold TGD buy U$1.38 09-apr-14 U$1.32 -4.3% $2 tgt, holding in 3q14
Minera IRL IRL.to spec buy C$0.27 22-jul-12 C$0.14 -48.1% Ready for financing deal
B2Gold BTO.to buy C$2.32 12-sep-14 C$2.28 -1.7% new position, value trade
Focus Ventures FCV.v hold C$0.23 01-jul-12 C$0.24 4.3% tgt 50c, added, avged up
Reservoir Min. RMC.v buy C$6.05 18-jun-14 C$5.05 -16.5% Big deposit, M&A, Cu play
First Majestic AG buy U$10.51 10-aug-14 U$8.16 -22.4% Main Ag play, 1st tgt $13.60
Dalradian Res DNA.to hold C$0.65 27-oct-13 C$0.71 9.2% Poss add window, tgt $1.70
Amerigo Res ARG.to buy C$0.445 20-jul-14 C$0.395 -11.2% new position, sm Cu play
NovaCopper NCQ.to spec buy C$1.05 09-apr-14 C$1.06 0.9% small Cu play started well
Goldquest Min. GQC.v hold C$0.26 27-oct-13 C$0.155 -40.4% key drills results soon
Lara Expl. LRA.v hold C$1.15 08-apr-12 C$0.63 -45.2% solid biz model, LT hold
Recommended short positions
None at moment
Smaller/Riskier
Coro Mining COP.to spec buy C$0.125 26-jan-14 C$0.055 -56.0% Cu spec play, can add
Salazar Res SRL.v spec buy C$0.28 02-mar-14 C$0.195 -30.4% small spec, new China JV
Closed in 2014 closed close price
Fortuna Silver FVI.to jan'14 C$2.80 23-dec-13 C$3.19 13.9% small ST trade closed
Rio Alto Mining RIO.to jan'14 C$2.06 07-jun-13 C$2.30 11.7% trading position finally closed
Network Expl. NET.v feb'14 C$0.01 22-jul-12 C$0.005 -50.0% position closed, did nothing
Tahoe Resources TAHO feb'14 U$13.10 08-apr-13 U$21.72 -65.8% short closed due to reality
Darwin Res DAR.v mar'14 C$0.10 14-jul-12 C$0.045 -55.0% tiny risk play dropped
B2Gold BTO.to mar'14 C$3.07 28-nov-12 C$3.35 9.1% closed to free up capital
Pretium Res PVG mar'14 U$5.38 22-nov-13 U$6.50 -20.8% short closed as port longer
Gold Res Corp GORO may'14 U$5.07 26-jan-14 U$4.12 16.7% took profit
Bear Creek Min BCM.v may'14 C$1.63 23-mar-14 C$2.05 25.8% Took profit, sm near-term win
Eco Oro Min. EOM.to aug'14 C$0.48 22-sep-13 C$0.26 -45.8% sold small loser to make room
True Gold TGM.v sep'14 C$0.395 02-feb-14 C$0.41 3.8% M&A won't happen, sold
Santacruz Silver SCZ.v sep'14 C$1.04 26-jan-14 C$0.86 -17.3% silver/M&A spec, rel. small
2009, 2010, 2011, 2012 and 2013 closed positions in appendices below
Now for some notes on a selection of the above stocks. I began on Friday to do something a
little different with this section and the plan was to paste up the five day price chart of each of
our open position stocks next to their names and along with the pretty graphs, attempt to write
something vaguely coherent about each one.
Frankly, I gave up. The idea sounded fine, but when it came to the script I found I was writing
a whole bunch of unwanted guff that wasn’t much more than filler for the weekly, so I scrapped
the idea and have limited things to just a few names this week. The idea to cover them all, one
by one, isn’t a bad one but on reflection I’m going to save it for a moment when there’s actually
something interesting worth saying.
First Majestic Silver (AG) (FR.to): AG came off better than most other silver plays, but
that’s only because it was whacked so hard the two or three weeks previous and being the lead
indicator type of stock, took its hardest hits before the others.
7

Rio Alto Mining (RIO.to) (RIOM): As noted Thursday morning (5)
RIO.to monthly production number filed to Peru’s Mining and Energy Ministry (MEM) was
published Tuesday evening and it showed RIO had produced 17,199 oz au that month. I took a
couple of mails asking whether that wasn’t a
little light, but a single calendar month of an
operation is difficult to gauge exactly (it would
only take a gold pour to happen on one day
earlier or later to see 2k oz change month) and
it’s the trend that’s our friend here, don’t split
hairs. La Arena is running well and there’s every
reason to expect 55k oz from the quarter.
Now to the five day chart and although RIO
held up better than most, it too was caught in
the rush for the exits on Friday and closed at
the low end of its weekly trading range. I’ve
tried to get myself worried about RIO again and
failed again, so it’s just sitting there, top pick and heaviest holding in the purse.
Timmins Gold (TGD): When I made the decision three or so weeks ago to hold TGD
whatever might happen, I was clear about the risk that it might drop under my original entry
price of all those months ago, the one i was pleased to have timed nicely (oh the irony). Last
week brought the reckoning to that risk and this weekend TGD sits 6c under my buy price and
8

in the red for (what I think is) the first time, having been over 50% higher at one point and
very close to my original sell target of U$2 (didn’t
quite get there, though).
Last week TGD behaved as a typical gold junior, no
worse or better than the average and caught in the
incessant bid hitting as much as any other vehicle.
Coro Mining (COP.to): Down a penny due to light trading on Friday during which somebody
decided they had to sell at whatever price, its big
percentage drop is not a worry this week but
equally I wouldn’t bat an eyelid if we saw a big
percentage upmove this time next week all the way
back to 6.5c or 7c. COP’s future, that of the small
exploreco, won’t be decided by the market but by
its own newsflow. As we know it has plenty more
fight and irons in the fire than your average tinycap
at the moment (see very recent coverage), it’s one
for which I have patience. My very small level of
share ownership helps that patience, too.
GoldQuest Mining (GQC.v): Word comes from the Toronto Cambridge House bash, at which
GQC was one of the few booth holders and one of the very, but very few juniors worth talking
about at the show (on looking down the list, I’d go
as far as to say the only one in a bunch of
otherwise very mediocre explorecos on display).
The word comes from a couple of separate sources
who talked with company head Bill Fisher and both
told this desk that Fisher had reported a single big
seller of GQC was the reason we’d seen the price
drop so hard. Apparently the seller liquidated a $5m
or $10m position (no exact number given, just
boundaries) and that the seller was now fully out.
As for this week, GQC bounced around between 15c
and 17c without showing any impulse to make it
back to the 20+c level. A flurry of activity on
Tuesday which is probably connected with the Precipitate Gold (PRG.v) news (see below in
‘Market Watching’) but apart form that, nothing of great interest.
The Copper Basket
After thirty-nine weeks of 2014 The Copper Basket is showing a 0.07% loss to level stakes.
9

company ticker price 1/1/14 Shares out Market Cap current pps gain/loss%
1 Augusta Res AZC.to 1.51 144.41 541.54 3.75 148.3%
2 Lumina Copper LCC.v 6.29 44.07 440.70 10.00 59.0%
3 NGEx Resources NGQ.to 1.43 168.71 315.49 1.87 30.8%
4 Reservoir Min. RMC.v 4.97 47.55 240.13 5.05 1.6%
5 Nevada Copper NCU.to 1.35 80.5 139.27 1.73 28.1%
6 Panoro Minerals PML.v 0.35 220.25 92.51 0.42 20.0%
7 Copper Fox CUU.v 0.375 402.96 76.56 0.19 -49.3%
8 Hot Chili Ltd HCH.ax 0.425 333.11 71.62 0.215 -49.4%
9 Curis Resources CUV.to 0.57 74.79 67.31 0.90 57.9%
10 NovaCopper NCQ.to 1.60 60.15 63.76 1.06 -33.8%
11 Western Copper WRN.to 0.76 93.68 62.77 0.67 -11.8%
12 Cordoba Min. CDB.v 0.90 58.81 16.47 0.28 -68.9%
13 AQM Copper AQM.v 0.11 139.24 12.53 0.09 -18.2%
14 Coro Mining* COP.to 0.10 159.37 8.77 0.055 -45.0%
15 Oracle Mining OMN.to 0.27 49.03 3.92 0.08 -70.4%
NB: HCH.ax priced in AUD$, rest CAD$ //CDB 2x1 split May'14 Portfolio avg -0.07%
And the basket average goes under zero. It’s only a sliver, but it’s the first time in 2014 that
we’ve had the Copper Basket average in
negative territory, even when copper was The Copper basket 2014, weekly evolution
25%
trading at under $3/lb earlier in the year, which
speaks volumes for the momentum of the sell- 20%
off in the last few weeks. It’s also worth
15%
mentioning that the average would be worse
than it is if we hadn’t stopped the counter on 10%
Augusta Resources (AZC.to) at $3.75 and kept
5%
moving the price on the remnant trades since
then, as the Hudbay (HBM) weakness has 0%
arb’ed AZC down to CAD$3.38 in small trades
-5%
since the realworld merger deal price went
through.
In fact we did see three names make weekly gains (OMN.to, AQM.v, HCH.ax) on decent
percentage but only technical-style rebounds. Then three remained unchanged (LCC.v, AZC.to,
PML.v) which leaves nine other weekly losers. Of those, the biggest hits were taken by Nevada
Copper (NCU.to down
17.2%), Coro Mining
(COP.to down 15.4%) and
Cordoba Mining (CDB.v
down 9.7%).
This week sees thirty-nine
weeks gone of the year, in
other words we’re at the
three-quarter mark and as
we took the pulse of the
basket at the quarter and
half way points, it’s time to
wheel out the same graphic
and update it so here you
are:
10
502.0 090.2 011.1 024.0 086.0 019.0 560.0 080.0 013.0 560.0 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72 ht4yam ht11 ht81 ht52 ts1nuj ht8 ht51 dn22 ht92 ht6luj ht31 ht02 ht72 dr3gua ht01 ht71 ht42 ts13guA ht7peS ht41 ts12 ht82
source: IKN calcs
Copper Basket Components after 39 weeks
200%
148.3%
150%
100%
59.0% 57.9%
50%
28.1%
20.8%20.0%
1.6%
0%
-11.8%
-18.2%
-50% -33.8%
-45.0%-49.3%-49.4%
-68.9%-70.4%
-100%
ot.CZA v.CCL ot.VUC ot.UCN ot.QGN v.LMP v.CMR ot.NRW v.MQA ot.QCN ot.POC v.UUC xa.HCH v.BDC ot.NMO
source: IKN stats

Far and away the best performer is the bought out Augusta, with the two other buyout plays in
the form of LCC.v and CUV.to in second and third spot. Pickings get a little thin after that
(something as iffy as NCU.to still commands 4th place) and we’re now at the point where losers
outnumber winners 8-7.
Another thing to note is the change since the last
reading (dark grey bars) which gives us a reading
on the worst performers in 3q14. NCU.to has
dropped heavily, as have WRN.to and the woefully
performing Colombia exposed CDB.v which has
gone from bad to worse. The best performer is
arguably CUV.to, thanks to that buyout offer from
Taseko (which looks badly timed in retrospect) and
it has to be said that RMC.v has faded badly after
being such a consistently strong name...just a
couple of months after I bought some, too.
Copper market price comment now, and to be
honest copper didn’t do that badly under last
week’s difficult, über-bull scenario for the US Dollar
and outright bearishness for anything labelled a
commodity. It’s hardly bullish in its aspect as it
bounces just above the (probably psychologically
important) $3/lb level but it wasn’t bad either and
as this further weekly chart illustrates below, we’re
still hanging onto the “higher low” formation that’s
been in play since March of this year. Yes I am still
bullish copper over the medium term and try as I
might to be more negative, I’m forced into the
conclusion that as yet there really aren’t that many
negative signals out there. Copper, if bearish,
should have dropped lower by now. Until otherwise
proven that’s a good reason to stay long.
Now its inventories corner and here are the bullet
points:
• Overall world stock levels moved modestly
higher, up 6,149 metric tonnes (mt), or
2.4%, to 266,085mt.
• Shanghai Futures Exchange copper warehouse stocks saw the biggest change, up
6,550mt (+8.7%) to 81,554mt, which adds the latest blob to the 2014 Shanghai-only
chart you see below.
• The LME copper warehouse inventories moved down by a slight 900mt, which make
three weeks and no strong signal but it was interesting to read in the Andy Home
column last week that one metals trader owns between 805 and 90% of all LME stocks
at the moment (link below).
• As for the Comex warehouses, their stocks moved up 599mt to breach 30k for the first
time in a long time, finishing the week at 30,031mt.
So another quietish week for copper stocks news, although I did so in the blog last week I urge
you again to read Andy Home’s column on base metals this week (6) as he has some smart
comments on the tight nature of world copper stocks, especially as pertain to the key market of
China. Good reading and overall a bullish pointer, which fits my personal preferences and bias
confirmation radar nicely ☺.
11

Shanghai Futures Exchange Warehouse Stocks, 2014
220000
200000
180000
160000
140000
120000
100000
80000
60000
12
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72 ht4yam ht11 ht81 ht52 ts1enuj ht8 ht51 dn22 ht92 ht6yluj ht31 ht02 ht72 dr3gua ht01 ht71 ht42 ts13 ht7 ht41 ts12 ht82
Mt Cu
source: Cochilco
Hot Chili (HCH.ax): HCH seems to have settled back after its early August upmove and it’s
still looking very tradable (700k+ volume on
Wednesday 2th). I continue to have my eye on this
stock, first and foremost because I’m still very
much the bull when it comes to the metal (see
today’s intro), second because it has some decent
projects in the right country for copper, but also
because the breakdown of ownership looks much
cleaner and in stronger hands now. And it’s been
beaten down to the type of distressed levels you
want for an entry into a risk/reward play in 2014.
Does the world want an exploration stage copper
play pumped by an over-optimistic newsletter
writer? Good question, I don’t know the answer to
that one.
Nevada Copper (NCU.to): People seem to be finally clicking on to the cruel reality, that it
doesn’t matter how many permits you have if your deposit and project is uneconomic.
The selling last week in NCU was particularly steep, reminding your author of his words last
week in IKN280:
“However, this is still one I haven’t changed my mind about, community enviro
approval or not. Permits are one thing, basic economics are quite another and ever
since NCU came out with its disappointing economic study for Pumpkin Hollow in late

2012 this has been a clear avoid. It’s staying that way.”
Damn, I need to work for a shortside fund.
The Low Cost Producer Basket
After 39 weeks, the Low Cost Producer Basket is showing a 0.47% gain to level stakes
company ticker price 1/1/14 Shares out Mkt Cap (Bn) current pps gain/loss%
1 Freeport FCX 37.74 1040 34.18 32.87 -12.9%
2 Goldcorp GG 21.67 812 19.07 23.49 8.4%
3 Barrick ABX 17.63 1000 15.24 15.24 -13.6%
4 Newmont NEM 23.03 497.87 11.85 23.81 3.4%
5 Franco Nevada FNV 40.74 155.39 7.69 49.46 21.4%
6 Silver Wheaton SLW 20.19 357.39 7.33 20.51 1.6%
7 Agnico Eagle AEM 26.38 173.43 5.18 29.89 13.3%
8 B2Gold BTG 2.02 948.9 1.93 2.03 0.5%
9 Pan American PAAS 11.70 151.41 1.76 11.62 -0.7%
10 First Majestic AG 9.80 117.02 0.95 8.16 -16.7%
all prices in U$, using NYSE ticker prices Portfolio avg 0.47%
All component stocks dropped and the overall basket lost exactly 3%, with B2Gold (BTG) the
worst loser, down 7.3% from last Sunday. The basket did better than its copper cousin above
and just managed to keep its head above water, but the chart tells its own story here:
The Low Cost Producer Basket: Weekly performance and
comparative to GDX control
35%
30%
25%
20%
15%
10%
5%
0%
13
ts13ceD ht91 ht9 dn2ram dr32 ht31 ht4yam ht52 ht51 ht6luj ht72 ht71 ht7peS ht82
basket
gdx control
source: Yahoo! Finance, IKN calcs
The speed of drop in September has decelerated a little over the last two weeks, but unless we
get a violent change in direction (of gold) the drops are set to continue and the lines are going
into negative territory. As for the spread between our basket and the GDX, that’s now at
3.55%.
Low Cost Basket: Percentage difference between
basket and GDX control, 2014
8%
7%
6%
5%
4%
3%
2%
1%
0%
ts13ceD ht5naj ht21 ht91 ht62 dn2bef ht9 ht61 dr32 dn2ram ht9 ht61 dr32 ht03 ht6rpa ht31 ht02 ht72 ht4yam ht11 ht81 ht52 ts1nuj ht8 ht51 dn22 ht92 ht6luj ht31 ht02 ht72 dr3gua ht01 ht71 ht42 s13guA ht7peS ht41 ts12 ht82
source: ikn calcs, NYSE/Nasdaq data

Franco Nevada (FNV) and Silver Wheaton (SLW): At the start of the year SLW was the
largest of the two streaming companies by around $1.4Bn. Today FNV is the biggest by around
$250m and being $1.3Bn larger than Royal Gold (GOLD) can now rightfully claim to be the
largest streamer in the world.
Franco Nevada is also the only stock that seems to have escaped from the wholesale selling
frenzy. It’s the only one left with a 20%+ gain on the year and even its closest rival, Agnico
Eagle, has seen very heavy selling to get it back to just 13% up on the year (not so very long
ago, AEM was busting through analyst price targets and seeing those targets moved to the
upside, now it’s under $30 again). Pierre Lassonde is everyone’s favourite and seems to be able
to do little wrong in this market. But fashions change quickly, so watch out.
Regional politics
The disconnect between politics and mining business, Uruguay edition
We’d previously anticipated this, but last week (7) we got some official word from Uruguay’s
‘National Directorate of the Environment’ (Dirección Nacional de Medio Ambiente) that the
pathfinder large-scale mining project in the country, Aratiri (owned by India/Brazil company
Zamin Ferrous) would have to wait for its environmental permits until the first quarter of 2015
(and though left unsaid, that’s probably a minimum wait too). This puts the permitting behind
the upcoming Presidential election date in December 2014 and neatly boots the problem out of
the minds of the electorate.
But the larger point isn’t confined to Uruguay and its fits/starts efforts to get formal, large-scale
mining on the move inside its frontiers; Even if it gets its permits, this big mining project is for
iron ore and that with or without full government approval the thing may not happen for years,
if at all, due to the poor market prices for the metal. The disconnect is between governments
and market forces, or if you prefer between politicians and reality. We see it a lot, not just in
Uruguay but in established “mining friendly” countries such as Mexico in which political parties
throw mud at each other for a while about the lack of jobs’ growth but then somebody who
understands basic supply and demand economics goes and writes an article such as this one
(8) “The Price of Silver Will Affect Mining Projects in Mexico” in CNN this week and confuses
them all. Or in Peru, where President Ollanta Humala paints all anti-miners with the same brush
and calls them “environmental extremists” (9) who are stopping progress while at the UN
Summit. There are of course political overtones and undertones in many of the controversial
projects (start with Conga) but Cañariaco has this thing about their town being dismantled and
moved, as well as their agriculturally fertile valley dug away and the fragile ecosystem they’ve
lived in for centuries changed forever (other people would use the verb ‘destroy’ there, I’m
trying to keep it calm). People who don’t know Greenpeace from Picasso’s Blue Period are
protecting their preferred way of life and don’t want to be moved from the place their great
great great grandparents were buried and if that’s an extremist attitude, a sizable percentage of
the world’s population deserves to be behind bars.
Brazil: Rousseff leads
A few weeks ago, we noted the surge in support for Miranda Silva on the back of Eduardo
Campos’s accidental death along with general disaffection for the Dilma Rousseff government.
However, at the time we still called Dilma as favourite even though she was behind in the polls,
basically because of the way in which Brazil likes to make clear its protests before things get
serious. The last couple of weeks have seen the Rousseff campaign move into full clear and cut
the gap, so when we heard this Friday that Dilma Rousseff now leads Marina Silva for both
round one and the all-important round two run-off, we weren’t that surprised.
Datafolha (one of the most accurate polling publications) now has (10) Rousseff on 40%, Silva
on 27%, and Aecio Neves at 18% for round which means Rousseff won’t have enough to
14

secure victory in the first round but will as fully expected meet Silva in round two (note that the
last Brazilian election to be decided in one round was back in 1998, before Lula Da Silva and all
of Brazil’s economically strong decade had started).
Meanwhile, in the head to head second round run-off, which is the vote that will decide it all,
we now have Rousseff leading on 47% and Silva on 43% (with the other 10% either undecided
or no-voters) the first time in the final stages of the campaign that Rousseff has shown a clear
lead.
Brazil Election Datafolha Poll: If the round 2 run-off were
tomorrow between Marina Silva and Dilma Rousseff, for whom
would you vote?
47%
50%
43%
45%
40%
35%
30%
25%
20%
15% 10%
10%
5%
0%
Rousseff Silva N/S N/A
source: Datafolha, Friday September 26th
15
%2-/+
rorre
fo
nigram
Peru: One week to go to the regional elections
As well as the big Brazil Presidential round one vote, this time next week we see voting in Peru
for the regional elections. Although there are literally thousands of governor and mayor jobs up
for grabs over the length and breadth of the country, the one that will likely get most attention
from abroad is in Cajamarca as the sitting Anti-Mining (he says he’s anti-Conga, not anti-
mining) governor Gregorio Santos runs for re-election despite being on remand in jail on
corruption charges. The feeling on this vote with just a week to go (11) is that Santos may well
have enough to get re-elected in round one without the need for a run-off (for that, he’ll need
to score 30%+1) and if that proves to be the case, it will go down as a black eye for the
national Humala administration.
If you’re looking for a trade on the back of the Peru elections, first port of call should be
Buenaventura (BVN) because it’s large-cap, liquid, playable both to the long and short side and
will be directly affected by the headline grabbing Santos/Cajamarca vote due to its exposure to
Conga. On previous occasions I’ve been guilty of assuming either good or bad political risk
news had been baked into BVN’s share price, only to see it move sharply up or down on the
back of developments in ‘sleeper’ fashion. I’¡m not sure why this should be but if the pattern
continues, there may be a trade in taking the short side of BVN on Thursday or Friday,
watching Santos perform strongly in next Sunday’s election (October 5th, to be 100% clear) and
seeing BVN sink as a result the week after. The main risk would be that Santos comes up short
in this round one vote and on that score, I’m obliged to state with a somewhat heavy heart that
vote rigging against the Santos candidature isn’t beyond the realms of the possible by this
government in 2014.
The other clear trade potential for the Peru regional was the one noted last week, that of
Walter Aduviri not doing as well as expected in the Puno regional governor election and facing
defeat in an eventual round two (see IKN280 for more on that). As I think this is a fairly likely
scenario a speculative long position in Bear Creek Mining (BCM.v) would be a valid option,
particularly as we noted in IKN280 that longs in the English speaking North have now been duly
scared by JP Morgan calling him the favourite for the job. I’ll take the under on that call and if it
works out, BCM could ping back to the higher $2s again (though we need to take into account
the weak silver price action seen since BCM.v dropped away, too).

Overall, of the two trade options I’d take a long in BCM.v over a short in BVN as the way to play
Peru’s regionals, as the potential gain is more likely and probably more in percentage terms too.
The downsides are that 1) it’s still risky to try second-guessing LatAm politics 2) silver exposure
is more volatile than gold exposure and adds more risk to the pie 3) any eventual defeat of
Aduviri wouldn’t be confirmed before the second round run-off were done, that will be
November. That means longer to wait for the potential payola.
Mexico: Mining companies now guaranteed not to lose concessions for
environmental contamination cases
Since the Grupo Mexico Buenavista case (see IKN Weeklies passim) came about, there have
been continued calls for environmentally polluting mining companies to lose concession rights in
Mexico. The chances of that call becoming a reality weren’t particularly high (away from lip-
service noises from the government in order to quell the protests, the type that are
conveniently forgotten later) but last week drove the final nail through the potential when PRD
Party leader and main left wing opposition politician in the country, Andrés Manuel López
Obrador (AMLO) called for exactly that measure to be made into law (12). From here the
analysis is simple: If AMLO calls for it, the government will never do it. The ultimate in knee-
jerk reaction, if AMLO were seen to be actively infleuncing sitting government policy Peña Nieto
would be immediately considered weak.
Argentina: What locals get to read about mining projects
It used to be said of Fidel Castro that if the Spanish language had no future tense he’d have
nothing left to say. These days the pithy comment stretches to all corners of Latin America (be
the corner Spanish or Portuguese speaking), with Argentina’s political class particularly adept at
the linguistic technique.
Today’s example comes from the governor of Jujuy province in northern Argentina, one
Eduardo Fellner, who last week met with John Smith, CEO of Silver Standard, and afterwards
explained to the Argentine press that the two had (13) “advanced in the analysis of
perspectives to expand the current project zone” of the company’s Pirquitas silver mine in the
region, a quote that was quickly turned into “Silver Standard To Expand Operations in
Argentina” by the assembled govt-friendly hacks. Presumably the English language trade press
weren’t earshot at the time, as the sound of laughter may have tipped off the local press into
thinking something wasn’t right.
Market Watching
Gold Reserve (GRZ.v) redux
We noted the upcoming arbitration decision quickly last week, including my personal position of
“not going there” (which will not change. We didn’t have to wait long for resolution, as Monday
afternoon saw the stock halted and then came the announcement that the ICSID/CIADI
international tribunal had awarded GRZ $740.3m in damages against the government and State
of Venezuela (14). This works out at U$7.91 per fully
diluted share, which rounds out at U$8.13 if we
assume the treasury position of GRZ if the cheque
arrives from Venezuela tomorrow.
Here’s the ten day chart that shows before and after
the award and although we could praise GRZ for not
dropping in the same way as so many other juniors in
the last two weeks, we’ve also stayed at $4.60-or-
abouts for the stock, way below the potential $8
number and that means 1) the market had largely
anticipated the favourable decision and rough size of
the award, 2) it looks as though some people used Tuesday as their liquidity event to sell their
16

GRZ holdings, possibly at a small profit as the three year chart at the end of this note points out
and 3) the market isn’t expecting Venezuela to pay. Which it won’t, of course.
People buying and holding GRZ from here are betting on a few things. Firstly, the Maduro
Chavista government won’t pay up, so they’d want to see a change at the top in Venezuela (be
that via ballot or coup). Secondly, they’d then want to see a friendlier attitude and conciliatory
position from the new government towards foreign investment. Thirdly, they’d want the new
Venezuela to pay the award in full. In a nutshell, all that’s why we have such a large gap
between theoretical equity and theoretical current asset value at GRZ today.
If you’re like me, you’d consider the chances of GRZ being paid in full in the indefinite future as
slight indeed and you’ll avoid speculating on this stock’s future.
Precipitate Gold (PRG.v): No need to rush
Advantages of running a free blog, part 53: Over the years, one of the interesting things about
running the blog has been to watch and see which of the subjects and themes covered elicit
sharp reactions and which are greeted with a great big meh by you kind people, the reading
public. I’ve learned to be surprised about this, because there have already been too many times
when I’ve spent time and much effort on an article only to get no reaction, while a silly three
line comment that takes about 30 seconds to put together on another day draws thousands of
hits, is shared around the web and fills up my inbox with comments and thoughts (not always
pleasant ones ☺).
An example of strong reaction came on Thursday morning to this post (15) on Precipitate Gold
(PRG.v), a junior exploreco working in the Dominican Republic that came out with an
interesting NR on Tuesday morning (16) that covered first results of drilling from its Ginger
Ridge property. In the six hole pattern was hole 5, and hole 5 is what I called the “bona fide
discovery hole” in that Thursday morning post. Here’s the table used in the post to help jog
memories:
As it happens, my post was more about the complete lack of reaction of the market to a very
respectable drill intersection and although I don’t claim to be the influence behind the share
17

price’s subsequent rally (jungledrums tell me there was a certain buyer who almost certainly
has no idea that my humble little blog even exists) I did managed by lucky timing to publish at
the lowest price and interest point for PRG.v last week...
...and that may be why I got all the mail that I did. That mailbag turned into exchanges with
both officers inside the company (open and honest), people who know the team (they got
generally good comments about them) and analysts who have either looked at the company
careful, or cover the company or own stock (or even a combo). It turned into an informative
couple of days and after chewing it all over, here are the thoughts:
• PRG.v has a decent chance of developing a new resource. Hitting what they did on a
first pass drill program was good work and people I consider ‘serious geologists’ like the
chances of Ginger Ridge.
• Its aspect is similar to GoldQuest (GQC.v) and its Romero/Romero South property just
23km or so from Ginger Ridge. It’s also similar to Unigold (UGD.v) which is exploring on
the other end of the same Tireo trend (though that one appeals less to me at present).
• PRG doesn’t have much money left in the treasury box, as once the final round of bills
from the drill program are paid they’ll be sitting on perhaps $700k. That’s low, but
there is good news as background burn rate is reportedly very low (PRG could limp by
on $150/qtr), its main backers are not against participating in another raise and a
similar drill program stage 2 would cost perhaps $500k, which would be well within the
bounds of a small and largely undilutive financing round. Therefore, money is a little
tight but there are companies in worse position and overall, PRG isn’t going to be
stopped by a lack of funds.
• At current prices, I think I’m better off with GQC.v. As stated on Thursday, in a better
or merely normal market PRG.v would have moved up sharply on that drill hole news,
but the fact remains that it didn’t and that’s indicative of where we stand today.
Meanwhile, GQC is more advanced and has the type of resource PRG is probably
looking to develop, has $8m as bank and options on what to do with the money, has
been beaten down hard and (in my opinion) very unfairly, so could give a bounce at
any time. If we consider straight enterprise value, GQC is around double of PRG and for
that you get a lot more security of resource and asset potential; far more than double
your money in my opinion.
• From an outsider looking in, the most obvious thing for these small Dom Rep
exploration companies to do would be to pool resources, merge and become one entity.
Rarely are there more obvious examples of when the whole would be worth more than
the sum of the parts.
The bottom line to PRG as stands is that I have enough on my plate with the small-ish long in
GQC and buying another company that’s doing what GQC did two years ago would be a
portfolio redundancy on my part. The news was good last week and you never know, further
down the line I may be cheering Ginger Ridge on as an active direct investor in the project, but
for the time being it’s a single good drill hole in a world that doesn’t care.
18

Toromocho production ramp up slower than even re-worked numbers
At the beginning of this month I ran a short post on the blog (17) that noted a pretty typical
production forecast for Chinalco’s new Toromocho mine in Central Peru in 2013, then the
revised reality in 2014. The blog post was short, came with the relevant links and went like this:
9/2/14
Expert copper supply predictions, episode 958
JP Morgan, September 2013: Toromocho will produce 167,000 tonnes of
copper in 2014.
Toromocho, September 2014: Toromocho will produce 85,000 tonnes of
copper in 2014.
Any questions?
Here we are at the end of the same month and with the latest production figures in hand (18),
we note that although Toromocho has managed to get into semi-gear and produce 24,666
tonnes of copper in the last three months (averaging just over 8kt/month), the total production
for the first eight months of 2014 is 38,805mt. If we therefore assume the mine manages to
run at the same speed for the rest of the year, it would put 2014 at around 71,000 tonnes.
Conclusion
IKN281 is done, we end with bullet points:
• Not an easy week to be in juniors. The best call I have is to hunker down, not make
any big or rash changes to your portfolios on the long or short side, watch, wait and
perhaps run a little round the edges trading.
• Which is where I’ve kept my interest and focus this week via a look at the potential for
Trevali Mining (TV.to) to offer a turnaround trade win on its 3q14 numbers. They’re
going to be a lot better than 2q14, that we already know. Chances are we’ll see TV
retun its first meaningful quarterly profit and these days, bottom lines count.
• Thanks to for surprisingly positive feedback on last week’s fundies note-that-wasn’t-a-
note on B2Gold. It felt a bit cheeky to run something that ranting on you, but from
reactions received it clearly hit a few nerves.
• Next weekend will be about elections, both national Presidential in Brazil and
regional/municipal in Peru. It may call for an extra edition summary of anything
tradable on Monday 6th October.
The top long-term pick is Rio Alto Mining (RIO.to). I thank you in advance for any feedback.
Flash updates will be sent promptly if required by events
I wish you good trading fortune, ladies and gentlemen.
Otto
19

Footnotes, appendices, references, disclaimer
(1) http://www.calculatedriskblog.com/2014/09/schedule-for-week-of-september-28th.html
(2) http://incakolanews.blogspot.com/2014/09/yes-virginia-ovais-habib-of-scotia-is.html
(3) http://www.minem.gob.pe/_estadistica.php?idSector=1&idEstadistica=8612
(4) http://finance.yahoo.com/news/trevalis-caribou-zinc-lead-silver-145430527.html
(5) http://incakolanews.blogspot.com/2014/09/rio-alto-mining-riom-rioto-produced.html
(6) http://www.reuters.com/article/2014/09/26/copper-market-home-
idUSL6N0RQ3P720140926?feedType=RSS&feedName=basicMaterialsSector
(7) http://www.tecnologiaminera.com/tm/d/noticiainternacional.php?id=8051
(8) http://www.panamericanworld.com/es/articulo/precio-de-plata-afectara-proyectos-mineros-mexico
(9) http://www.startribune.com/nation/277241351.html
(10) https://twitter.com/elizondogabriel/status/515627076628795393
(11) http://www.larepublica.pe/31-08-2014/en-cajamarca-elecciones-definiran-el-futuro-del-proyecto-minero-conga
(12) http://noticias.terra.com.mx/mexico/pide-obrador-retirar-permiso-a-
mineras,58366ac6ce3b8410VgnCLD200000b2bf46d0RCRD.html
(13) http://www.aminera.com/index.php/mineria-internacional/item/7032-miner%C3%ADa-%E2%80%93-anuncian-
posible-expansi%C3%B3n-de-silver-standard-en-jujuy.html
(14) http://finance.yahoo.com/news/gold-awarded-740-3-million-234800300.html
(15) http://incakolanews.blogspot.com/2014/09/precipitate-gold-prgv-has-message-for.html
(16) http://finance.yahoo.com/news/precipitate-drills-discovery-hole-containing-150858371.html
(17) http://incakolanews.blogspot.com/2014/09/expert-copper-supply-predictions.html
(18) http://www.minem.gob.pe/_estadistica.php?idSector=1&idEstadistica=8612
Stocks To Follow Closed Positions, 2012
Closed in 2012 closed close PPS
Soltoro SOL.v jan'12 C$0.87 07-nov-11 C$0.94 8.0% cash moved to BCM.v
Gold-Ore Res GOZ.to feb'12 C$0.84 13-oct-10 C$0.98 16.7% trade closed on ELG.v offer
Minefinders MFN feb'12 U$11.68 17-nov-11 U$14.80 26.7% target made, trade closed
Iron Creek IRN.v mar'12 C$0.58 26-sep-10 C$0.31 -46.6% time up on small bad trade
U.S. Silver USA.to apr'12 C$2.18 15-mar-12 C$1.86 -14.7% ST trade no good, cut loss
Augusta Res. AZC.to may'12 C$3.10 29-jan-12 C$2.07 -33.2% bad mkt, bad trade cut loss
Bellhaven BHV.v may'12 C$0.50 22-sep-10 C$0.28 -44.0% new mgmt not impressive
Zincore Metals ZNC.to may'12 C$0.325 29-jul-11 C$0.17 -47.7% bad mkt, bad trade cut loss
Soltoro SOL.v may'12 C$0.70 18-mar-11 C$0.41 -41.4% bad mkt, bad trade cut loss
U.S. Silver USA.to aug'12 C$1.78 27-jul-12 C$1.36 -23.6% fail ST trade close pre split
Estrella Gold EST.v aug'12 C$0.91 27-mar-11 C$0.14 -84.6% Closed on port realignment
Fortuna Silver FVI.to sep'12 C$1.07 03-may-09 C$5.32 397.2% sell call $6.17/ Mar25
Strait Minerals SRD.v oct'12 C$0.125 09-dec-11 C$0.12 -4.0% closing coverage til FY13
Sunward Res SWD.to oct'12 C$1.47 13-mar-11 C$1.21 -17.7% sold, took loss
Gold Res Corp GORO oct'12 U$21.47 09-sep-12 U$17.40 19.0% Short trade closed
Yellowhead Min. YMI.to nov'12 C$1.00 01-apr-12 C$0.63 -37.0% sold, took loss
Primero Mining PPP nov'12 U$7.26 07-oct-12 U$6.73 7.3% Short trade closed
Bear Creek Min. BCM.v nov'12 C$3.38 07-nov-11 C$3.72 10.1% Took small profit
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Vena Resources VEM.to dec'12 C$0.70 31-may-09 C$0.18 -74.3% Failed trade (caps F)
Galway Res GWY.v dec'12 C$2.19 24-nov-12 C$2.30 5.0% closed good ST arb trade
Stocks To Follow Closed Positions, 2011
Closed in 2011 closed close PPS
Sunward Res SWD.v jan'11 C$1.05 21-nov-10 C$1.63 55.2% target made, trade closed
Serengeti Res SIR.v mar'11 C$0.245 05-dec-10 C$0.285 16.3% sold pre-tgt, ST trade fail
Fronteer Gold FRG apr'11 U$2.37 03-may-09 U$15.24 543.0% buyout, trade closed
Minefinders MFN apr'11 U$9.09 07-nov-10 U$16.89 85.8% target made, trade closed
Metalline Min. MMG may'11 U$1.04 26-jan-11 U$0.89 -14.4% exit, resource disappointed
Peregrine Met PGM.to jul'11 C$0.87 06-mar-11 C$2.60 198.9% buyout offer, closed
Dynasty Metals DMM.to jul'11 C$4.20 03-may-09 C$2.85 -32.1% Sold. Fail. Move on.
Aura Silver AUU.v aug'11 C$0.22 13-oct-10 C$0.16 -36.4% Bad pick. Take loss
U.S. Silver USA.v aug'11 C$0.52 26-jan-11 C$0.71 36.5% closed to make room
B2Gold Corp BTO.to sep'11 C$2.80 12-may-11 C$4.27 52.5% target made, trade closed
Bear Creek Min. BCM.v sep'11 C$3.80 27-may-11 C$4.17 9.7% macro sell call victim
Minefinders MFN sep'11 U$14.70 10-aug-11 U$15.15 3.1% macro sell call victim
Great Panther GPR.to sep'11 C$3.03 22-aug-11 C$2.64 -12.9% macro sell call victim
Fortuna Silver FVI.to sep'11 C$1.07 03-may-09 C$5.36 400.9% sold 20%, macro sell call
Focus Ventures FCV.v nov'11 C$0.40 20-apr-10 C$0.20 -50.0% cut losses, bad trade
Regulus Res. REG.v dec'11 C$1.17 14-aug-11 C$0.52 -55.6% cut on news of poor 43-101
2009 and 2010 closed positions in appendices below
Stocks To Follow Closed Positions, 2010
Closed in 2010 closed close PPS
B2Gold Corp BTO.to Jan'10 C$0.88 08-nov-09 C$1.49 68.2% target made, trade closed
Radius Gold RDU.v Jan'10 C$0.18 23-aug-09 C$0.40 122.2% target made, trade closed
MAG Silver MVG mar'10 U$5.60 23-nov-09 U$7.28 30.0% closed in pdac week
Riverside Res RRI.v mar'10 C$0.435 20-sep-09 C$0.60 37.9% closed in pdac week
Amarillo Gold AGC.v mar'10 C$0.81 31-may-09 C$0.70 -13.6% closed in pdac week
B2Gold Corp BTO.to apr'10 C$1.24 18-feb-10 C$1.50 21.0% target made, trade closed
Lumina Copper LCC.v apr'10 C$0.84 14-jun-09 C$1.55 51.2% total position now sold
Troy Resources TRY.to may'10 C$1.10 03-may-09 C$2.25 104.5% sold on negative results
AuEx Ventures XAU.to may'10 C$2.51 24-may-09 C$3.38 34.7% trade closed
Nevada Copper NCU.to jun'10 C$3.27 14-mar-10 C$2.03 -37.9% need to lower Cu exposure
Carpathian Gold CPN.to jun'10 C$0.39 14-mar-10 C$0.35 -10.3% too exposed to cap raising
Amerix PM Corp APM.v jun'10 C$0.065 08-nov-09 C$0.05 -23.1% victim of macro bear
Antares Minerals ANM.v jun'10 C$1.42 06-dec-09 C$2.10 47.9% sold half
Vena Resources VEM.to jun'10 C$0.37 31-may-09 C$0.23 -37.8% sold half
Minera Andes MAI.to sep'10 C$0.75 28-jul-10 C$0.95 26.7% ST trade closed
Gold-Ore Res GOZ.to sep'10 C$0.52 01-aug-10 C$0.75 44.2% target made, trade closed
B2Gold Corp BTO.to sep'10 C$1.45 25-may-10 C$2.01 34.5% target made, trade closed
Blue Sky Uran BSK.v oct'10 C$0.41 19-may-10 C$0.22 -46.3% v small v bad trade closed
Dia Bras Expl DIB.v oct'10 C$0.14 30-aug-09 C$0.35 150.0% target made, trade closed
S. Amer. Silver SAC.to nov'10 C$1.38 24-oct-10 C$1.60 -15.9% loss on short, small fail
Ventana Gold VEN.to nov'10 C$7.92 27-jun-10 C$13.51 70.6% trade closed on buyout
Lumina Copper LCC.v nov'10 C$1.42 11-aug-10 C$3.65 157.0% trade closed
Antares Minerals ANM.v dec'10 C$1.42 06-dec-09 C$8.40 491.5% trade closed
Rio Alto Mining RIO.v dec'10 C$0.69 23-mar-10 C$2.16 213.0% trade closed
Coro Mining COP.to dec'10 C$0.585 03-oct-10 C$1.24 112.0% target made, trade closed
Stocks To Follow Closed Positions, 2009
Closed positions closed closing PPS
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Cardero Res CDY/CDU.to May'09 U$1.20 03-May-09 U$0.87 -27.5% sold on negative news
Eastmain Res. ER.to May'09 C$1.04 06-May-09 C$1.315 26.4% trade closed
Radius Gold RDU.v May'09 C$0.165 03-May-09 C$0.235 42.4% trade closed
Latin Amer Min. LAT.v May'09 C$0.12 03-May-09 C$0.158 29.2% trade closed
Aquiline Res. AQI.to July'09 C$2.03 16-Jun-09 C$1.68 -17.2% took loss, bad timing
Chariot Resources CHD.to Aug'09 C$0.20 12-Jul-09 C$0.415 107.5% trade closed
Castle Gold CSG.v Sep'09 C$0.64 02-Aug-09 C$0.60 -6.3% ST trade didn't work out
Guyana Goldfields GUY.to Sep'09 C$2.30 12-May-09 C$4.50 95.7% profit taken
Los Andes Copper LA.v Sep'09 C$0.09 21-Jun-09 C$0.09 0% trade closed
Pediment Gold PEZ.to Oct'09 C$0.80 09-Aug-09 C$1.00 25.0% trade closed
Minera Andes MAI.to Oct'09 C$0.68 03-May-09 C$0.71 4.4% too much bad news
Dynasty Metals DMM.to Nov'09 C$4.18 03-May-09 C$6.01 43.8% half sold
Rusoro Mining RML.v Nov'09 C$0.55 03-May-09 C$0.57 3.6% underperformed
Important Disclosure
The information and opinions contained within this report reflect the personal views of the author and therefore all
material within should not be construed as accurate or reliable or be utilized as advice for investment or business
purposes. Independent due diligence and discussions with ones own investment and business advisor is strongly
recommended. Accordingly, nothing in this report should be construed as offering a guarantee of the accuracy or
completeness of the information contained herein, as an offer or solicitation with respect to the purchase or sale of any
security or as an endorsement of any product or service. All opinions and estimates included in this report are subject to
change without notice. It is prohibited to copy or redistribute this report to any type of third party without the express
permission of the author.
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